give an update. >> good afternoon, mr. president, commissioners, general manager. i'm the general manager. julie is out of town. my focus, as all other projects, are progressing smoothly. we have quite a few challenges, as you know, on this project. most challenging to date is how to modify the design to account for the newly found slides under the observation of the left hill abutment and start the excavation in june again. design consultant teams, along with the project teams, as well as the contractor, consultants, we worked hard. around the clock, sort of. and came up with a solution. on september 20th this was presented to the team. the team, including the

staff, technical advisory panel, evaluated the design approach and concurred with it and brought it to senior management and the decision was made to go ahead and proceed with it. what is it? the initial approach, as you recall lived here in july and early august, we were thinking to have only a lay back on the further side of the hill. further analysis has indicated there is a very high risk and can't be ignored. the decision was to have it 2-1 slope on the north and side -- south side of the observation hill. we are working with the california department of safety dams to make sure design is acceptable to them. they are comfortable with this decision. what is the impact of this thing? of course the impact is

harry because it will generate extra 1.62 million yard of soils which needs to be disposed of. in addition there will be 1.3 million yard which will be staged temporarily, then used in construction of the dam itself. so that will require a double-handling. challenges, we said okay, start your excavation again on the top of the hill. and the challenges to find the places where we can dispose of this soil. so we started dialing -- already dialoguing with the permitting agencies. the u.s. corps of engineers and california fish and game and regional water board to explore the different possibilities. we are looking. what we are doing is, our target is by the end of this month -- by the first milestone, we will have a

complete permitting package delivered to these agencies where we want to put these. it is critical. the reason why is two reasons. number one, by the middle of january 2013 contractor will run out of spaces where they can put these. second one, to estimate where to cost they need to know where to haul it. we will be pushing this through. what will be the impact of it? impact is this. remember the -- i think in the last two, three times when julie was here she mentioned a figure of about $60 million. reminding you that that's only the construction cost. that construction cost was only related to if we do only the north side of the hill. of course doing both will

add on lot more quantities and it will be more costly. on top of that if we put soft cost as mitigation cost because now we have to please these agencies as well, will it be significant impact, as well as the time as well. what are we doing? what we will do is we have asked the contractor to provide us a rough order of magnitude estimate by the end of this month, october. then what we will do is we will go over it and they will give us a final estimate by end of november. we will negotiate by end of december. by end of december, we will have total story to tell you. however, in the september quarterly meeting we will put an order of costing numbers in there so you will understand what we are

looking at it. challenges, it is not the end of the challenges yet. the reason is this. the geological data still leaves evaluation regarding impact of upper portion of this. it cannot be done -- bearing there is no risk in it, we want to make sure that when the hill is cut and we will look to see physically there is no impact we take a couple months before we exactly know. probability of initial excavation is low but still there is a risk of it. to date the problem is to date we have completed the project only 25%, along with the goal. there are risks, which i told you excavation and grouting will cost money.

even though the magnitude of those risks will be low. we will be identifying those as we look at estimates and bring it to you. good point. the only point at this moment i can say is even though the numbers are looking really bad we are making progress. the team, whether it is a contractor, the cm, the drilling team, everyone along with the agencies are working very hard, very coherently so the project can proceed finally. this is the report. we will keep continuously updating you as e get more information. >> thank you. commissioners, any questions? commissioner cain. >> i was just checking a

few notes. could you help me with the history. how many people or different concerns do we have looking at the problem? >> how many different consultants are looking at it? >> yes. >> the main consultant is urs. that sour designer of record. then we have the technical panel, advisory panel. they have five different experts in the industry who come with different backgrounds, some professors, some have different backgrounds. they participate in it. then there are some other people we hire to do the geotechnical borings and what not. we have a museum on board. then we have contractor team. >> okay. how many people did we have on board to begin with

vis-a-vis how many off board? >> the number of people? >> yes. >> i don't have a number in my tips but we can provide you that information. we can give you a little analysis of how many people were listed, whatever. >> that is what i would like to see. i would like to see the original consultants. when they came up with this problem. what's happened since then. how many people have we brought on board. >> sure. >> and i would just like an analysis. >> sure. >> maybe i can offer this. we had a designer, urs, actually responsible for the design. they characterized the geology of the area. we hired a construction

manager to make sure they conformed to the plans and specs. as the contractor was excavating they identified a potential ancient fault. at that time we engaged the consultant urs, who's the designer to look at it, we had our construction manage tore also look at it. we hired or brought in the t.a.p., technical advisory panel as independent so we had all our bases covered. >> who do they belong to? >> they are experts that are in the field. technical experts because we wanted independent. because urs have a vested interest. they are a designer and of course want to protect their design. we have a construction manager as well. so that is why we brought in more players to make sure we are moving in the

right direction going forward. we can give you a number of consultants before and then also the -- [ indiscernible ] >> okay. not a problem. >> i think that -- if i can just add to that, i think the whole question of what i would think of as the due diligence process is something that came in the size of this. and the magnitude and impact on both budget and schedule. it is important that that be a very visible process. we need to make clear what we have done to make sure we are doing enough and not too much. how do we draw that line. the various interests we have to serve. the number of consultancy, the money we are spending and the logic process to make sure we are doing everything we can and

should to respond properly. >> thank you. >> thank you. >> the second item is an update on cca and ask barbara hail for an update. >> barbara hail, general assistant for power. i'm happy to report we completed the board of supervisors process september 18th. our program as conceived and presented to you is -- has been formally approved. just to remind folks i have a few slides on overhead, please. this program is the program as we have talked about it several years now. it provides customers -- residents in san francisco, businesses an opportunity

to choose clean, renewable power as power to their business or residents, a partnership with pg&e where pg&e continues to provide services except for generation supply. it is premium, 100% renewable so it is more expensive to participate in this program than in pg&e standard tariffs. we have the same program mitigations that we have described to the commission before for our program risks targeting and phasing the program to make sure we have the right mix of customers for procured power. we are procuring power under contract with shell energy north america. part of what we engaged in with the board of supervisors resulted in some amendments to the

program. that is what i wanted to highlight. the main emphasis that we heard from the board of supervisors as they reviewed the contract authorization we were seeking was a concern that customers not be surprised to be part of the program. this is same concern mayor lee also expressed. we want to make sure that has a broad customer notification process, where regardless of the language you speak in your home, regardless of your social economic program you will learn and make a choice to participate or not. strong part of the amendments we heard from the board were to really make sure low income customers in particular understand the program and what it means to them and

their pocketbook. that's the amendments summarized here. strong emphasis on informed participation. in light of that we had planned and continue to plan a robust education and notification to customers about this program. that involves paid media, partnering with community-based organizations to make sure we are really talking through folks who have contacts within the communities. and it is a community engagement program. we expect to be partnering with other city departments, including the department of environment as we embark on this education and notification program. you will see on the consent agenda, 8c has us procuring

additional resources through a contract so we will have an extensive outreach program. i wanted to also take a moment to remind the commission of the steps that we had been asked to -- conditions rather, we had been asked to meet prior to launching the program. these are simply the conditions that you had articulated us to meet in the resolution you approved in advance of going to the board of supervisors for approval. so this is a quick summary of those conditions. i can say that -- i can give you a quick status on each of those. so clean power s.f. rates have to be approved by pickup -- puc and board of

supervisors. we are targeting january at board of supervisors for that activity. we need a final determination of the c.c.a. bond amount from the california public utilities commission. it is unclear on the timing on that. we already are meeting the requirements they have laid out, which was $100,000 bond. so we have met that requirement. whether they are going to have another decision or not is unclear to us at this point. all of the appropriations having been authorized was also a condition. that's complete. power enterprise having rates in place to be financially stable and in compliance with the commission's reserve policies, that is complete now. of course it is revised quarterly and we'll come back to you on that regular schedule. we will also be sure to come back prior to asking you to allow us to launch the program, revisit that and make sure we have met that condition. that is an ongoing check, as is part of our usual quarterly review.

and we will need to have a contract for customer billing and data management. the back office functions. that is targeted to come to you in december. to give you a broader view of the next steps, we are here in october, as you see. and expecting them to hopefully successfully launch the program in july of next year. with that i'm happy to answer any questions. >> commissioners. >> i just have a request to at some point -- i think this is a great first step, thank you. >> thank you. >> especially in sort of letting us know because i wasn't quite tracking all the board amendments made at the time, so this is helpful to have this. but i did really hear loudly and clearly about this interest in making sure we do the proper

outreach. >> yes. >> that is so important. especially to our low-income communities. i see on the time line that we are not going to be starting that really until january, right? >> correct. >> so we've got a couple months to get this right. >> yes. >> i'm just hoping you can come back to us next month, say, with a more fleshed out plan, strategy, time line, budget. you know, whatever else to really feel like we are doing we can to reach those communities. >> sounds great. we intend to come back with more information. as i mentioned, we have a contract on the agenda for approval today that will get us engaged with our consultant on that. hopefully in november, early december we will have a fully fleshed out program we can bring to you and make sure we are responding to that interest in an outreach. >> great. i know we are trying to schedule a lafco meeting. seems that would be great number one agenda item on

that at that meeting, is to really have a good, strong plan for outreach. to be able to address those issues. >> yes, thank you. >> even something that would have -- i would love to see something visual like a map of the low income communities, the neighborhoods we are addressing. maybe overlaid by the focus group and where we are rolling out, something like that. >> okay. >> yes. commissioner caen. >> i don't want everybody jumping on me, but i have always been cures why we have never challenged the state in terms of the opt-out situation. has that ever been addressed, have we ever

gone to them and said we are a diverse community. not many in marin county certainly, i don't believe, as diverse as we are, why is that such a rule can't we approach them and say let's do it this way. that is what i'm hearing through the board of supervisors. that is what i'm hearing from a number of people actually. get all the people in your bucket first, then proceed. i'm curious about how this has happened over the years. >> i can speak to the formation of the law. i wasn't with the city or wasn't sure what the city's

level of engagement on the law but the community choice aggregation law was authored by then assemblywoman caroll migdon, so it was a san francisco initiative. through the legislative process, most parties supported the overall gist, if you will. my recollection is the effort to have it staged as an opt-out as opposed to opt-in was informed by efforts on the telecommunications side, where with deregulation and the allowing of competition within telecommunications market, where it wasn't just local phone service by pac bell anymore.

long distance and local phone service competition was an opt-in type of program. there was dissatisfaction with the amount of penetration that was achieved by competitors when that market was attempted to be opened up. so i think that influenced the thinking of the policymakers at the -- in the assembly and senate oversight committees that oversee electric telecommunications issues, because those are combined committees. back in 2002, when that happened, that is my recollection of the formation and dialogue that was happening at that time. that doesn't preclude us. the opt-out requirements don't preclude us from having a preenrollment phase, a phase that allows us to say, hey, this is the program we are proposing. who wants in. we can certainly do that. we are planning to do that, commissioner, so that as part of our education and notification we are really

talking to folks who want to learn more and to participate in the program, as well as talking to folks who really aren't interested in the premium product at the premium price. >> that is not my full understanding of the program. as we see with hc, we are giving $1,104,000 for this training. which i think is very necessary. don't doubt me on that. but i have also aware of the fact the key people targeting will have already expressed an interest, with

those studis that were done a while back saying that they would be willing to pay more for green power. i'm starting to question if we need these programs now, if those are the people that we're not even going to be targeting. if you follow my train of thought here. >> sorry, i don't commissioner. if we need the consulting assistance? >> i believe -- may i take a shot at it? >> sure. >> i think she is really asking if we have identified people who are willing to participate and willing to join, why do we need this contract if we're going to bring those in first. and i think that we just have an idea who is interested.

we want to make sure we have maximum penetration because we have 3 megawatts where we have to sell. we haven't captured all the people. we want to do more robust. as part of phase i we didn't want to concentrate on low income. we want to make sure everyone understands the program. as barbara was saying, and ed harrington said, we don't want to unknowingly capture someone but people willingly wanting to be in the program. that is the challenge with the communication consultant and our staff, the department of environment. how can we best give that information out and be as transparent as possible. i think that is what this consultant will help us formalize a communication plan and strategy.

>> well, it was my understanding that we already did this. >> the work we did so far, commissioner, was survey work. it was polling work. to test the market, if you will, for -- test the appetite of san franciscans for the program. now we talk about account and customers of record and saying, you know, we tested and you sounded like you were interested, now is the time to really commit. we want them, when making the commitment, to be making it in an informed way. that is why we are proposing the education and outreach program and the communications consultant that's item 8c. >> what happens if you get a negative response? >> so under our program we are phasing it so we will have -- we will touch a portion of san francisco

residents in the first phase. if more people said no than project wed will reach out to more san franciscans until we achieve the overall number of megawatts we have committed to with shell. i say committed to, we haven't actually committed with shell yet. that comes later. >> sorry to push this. but i assume the people we are reaching out to are prime people we would assume would want to go with this program. you are saying if they have a negative response then we go to another echelon, we are less likely to approve this. >> given the polling results, yes. i remember polling by nature. it is a sample of san franciscans, it is not

everyone. it is helpful and we can pull it up on the map. soint the board here. what you see here is san francisco and the districts, supervisorial districts. the darker green coloring is more likely that precinct is to have a population that says yes, we want to stay with the program. you can see throughout san francisco how receptive the polling says the customer base is. we are proposing in the first phase to target households and achieve about 90,000 accountholders saying yes, please. there are 230,000 residential accounts in san

francisco. if our projection of that first 90,000 account holders is wrong, we can reach out to more customers and see if others are interested. we are really looking at this customer outreach and education campaign as a way to make sure we are signing up the right folks who really want the program. but yes, we have done our homework to see if there is an appetite. this map shows you the results of that effort. >> i have seen all those studies. may i have the map up again, please. still on the board, we have overhead, please? thank you. okay. you are saying the panhandle -- >> the dark green. >> so you see gray area. >> the dark green is